The basis of a cryptocurrency is blockchain technology. Cryptocurrencies are created and transmitted via a decentralized computer network without the involvement of a central bank or other financial institutions.
Cryptocurrencies can be exchanged for traditional fiat currencies – dollars, euros, etc. Often you can also hear the term “altcoin” for all cryptocurrencies except Bitcoin.
Let’s say you decide to invest in a cryptocurrency and make money with the price difference.
How much and in which currency is invested, everyone decides for themselves. However, we advise beginners to invest only as much money as you are willing to lose.
And of course, a constant observation of crypto news is always part of it. Step 1. Analyze the situation on the crypto market
Every currency has periods of decline and growth. The actual principle of making money with cryptocurrencies is simple: buy cheaper, i.e. buy when the price drops, and sell more expensive when it rises again.
Over the course of 2020, bitcoin’s price has fluctuated sharply, in part due to the global economic crisis associated with the coronavirus pandemic.
At the beginning of the year, it was worth $7,200, in the end around $19,000.
The world’s first cryptocurrency began rapid growth in 2021. At its peak, Bitcoin was trading around $68,000, after which a gradual decline began.
At the time of writing this article, it is worth about $38,000. Step 2: Think about the possible risks
The financial market is like a living organism. It is subject to both positive and negative price fluctuations.
The high volatility of cryptocurrencies allows you to make quick and high profits through speculative purchases and sales, but there is no guarantee of minimal profitability.
Do not open unchecked links in emails. Phishing is one of the most common risks when trading cryptocurrencies.
Emails from addresses disguised as known sources also ask you to click on links or enter confidential data. This will give scammers access to your passwords and logins, bank cards and other data. Step 3: Select a currency you want to invest in
The risk factors can be divided into two main groups: the volatility of cryptocurrencies and security issues.
So do your research on the cryptocurrency you want to buy.
Subscribe to the official resources of the developers. It may take you far more than an hour to decide which cryptocurrency to invest in.
The only way to find out where to invest is to read the news and study analysis.
While this may sound boring, it is very important for the safety of your investment, as there are many scammers in this environment.
Buy cryptocurrencies only from regulated exchanges as they guarantee the legality and security of financial transactions.Step 4: Choose your exchange and merchant tools carefully
Read a site’s reviews and see what security standards it’s based on. Carefully check the fees charged by the exchanges, as these can make up a large part of your profits.
Also pay attention to the taxes you have to pay on the income earned.
An exchange offers a large number of instruments that make trading easier for you.
You can also take advantage of trading platforms and applications where you can also find various trading instruments, besides, there are numerous trading software such as Bitcoin Code that make life easier and easier for many traders.
Also, there is a stop loss that allows you to automatically limit your losses.
In addition, artificial intelligence algorithms ensure that you do not fall into the red. Is it worth investing in cryptocurrency: a summary
The risks arising from the volatility of cryptocurrencies can be handled in a friendly way.
Through careful observation and analysis of all small price movements, experienced traders have learned to capitalize on them by buying and selling coins at the right moment.
This skill comes with time, but it is also supported by knowledge – learn the trading instruments for it, they help you not only to stay in the plus, but also to make profits.
Yes, the cryptocurrency market is volatile and unpredictable. There are experts who do not recommend them for long-term investments.
But Bitcoin has been around for more than 10 years, much longer than the same experts have predicted. And even though there are always ups and downs, the crypto market will still see steady growth in the long run.
- Crypto Art